CHICAGO, IL--(Marketwired - Oct 28, 2014) -
- Men more likely than women to pay off their credit card every month and never carry a balance
- More than a third of women concerned about paying off credit card debt
- Men carry higher student loan balance ($44,248) vs women ($34,208)
A survey released today by BMO Harris Bank found that men are more likely than women to say they pay off their monthly credit card balance regularly, with 39 percent of men say they always pay off their balance compared to 27 percent of women.
The report also revealed more women (35 per cent) list paying off credit card debt as a major financial concern compared to men (22 per cent). Fewer men than women say they are concerned with financial issues such as paying off credit card debt, paying down a mortgage and saving for retirement.
The results show a number of gender gaps in credit card behavior:
- 14 percent of men and 10 percent of women say they usually pay off their credit cards every month, but will occasionally have to carry a balance
- Women were more likely than men to say they try to pay off their credit card every month but quite often are left carrying a balance (22 percent versus 16 percent)
- Men and women were similar in their tendency to carry a balance -- 18 percent of men and 19 percent of women said they always have a balance
For bills other than credit cards, 74 percent of men said they always pay their bills on time, compared to 59 percent of women.
"We encourage our customers to pay down credit card debt as quickly as they can to avoid or minimize interest costs," said Alex Dousmanis-Curtis, Head of Retail Banking, BMO Harris Bank. "If you do have to carry debt, consider moving high interest rate balances to a low interest rate loan or line of credit, or a lower-rate credit card.
"To help keep your spending on track, look to set a monthly budget. Also treat your credit card as a secure and convenient payment tool rather than a borrowing tool."
"In the wake of the Great Recession, consumers have been using credit cards more cautiously, despite this method of payment remaining as flexible and convenient as before. Consumers are now much more aware that credit card loans tend to be more expensive than other forms of borrowing and escalating loan balances can quickly sneak up on you. In turn, consumers are paying off their card balances more determinedly and drawing down less of their credit limits, one of the paths to improved personal credit ratings," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets.
"According to the Federal Reserve Bank of New York, through the first half of 2014, the number of credit card accounts increased 1.7% and the credit limit on total cards outstanding grew 1.2%. However, credit card balances have actually decreased 2.0% so far this year, an indication that consumers are employing their credit cards more cautiously."
Americans were also asked about their financial concerns, from current loans to saving for retirement. The results indicated a narrow gender gap in concerns around student debt, with 20 percent of women saying it was an issue versus 17 percent of men. However, men were found to carry a much higher student loan balance ($44,248) compared to women ($34,208).
Women were also more likely than their male counterparts to say they considered a number of other issues to be a major financial concern:
|Paying off credit card debt
|Paying bills on time
|Not having enough savings for future purchases (e.g. house or car)
|Paying down a mortgage
|Saving for a child's education
|Saving for retirement
BMO Harris offers the following tips for minimizing credit card debt:
Don't create more debt: To start reducing debt, you need to put your credit cards away. Even small purchases add up; if you don't pay off your balance in full every month, you could end up paying thousands of dollars extra for these necessities. Instead of using credit, try paying for things with cash or a debit card.
Pay more than the minimum payment. It may not seem like much but paying just $25 more toward your debt each month can make a huge difference in the amount of interest you'll pay over time. By increasing your monthly payments by just a small amount, you'll pay down your debt faster and significantly reduce the amount you'll pay in interest. You'll also free up your available credit, which can improve your credit score. By boosting your credit score, you'll become eligible for better interest rates on loans, helping you save even more in the long run.
Consolidate your debt. Consolidating your credit card debt into a home equity line of credit can save you in the interest in the long run, plus you'll have the added convenience of making only one monthly payment, instead of paying several bills each month.
Talk to a financial professional. Facing debt can be an emotional task, but getting unbiased advice can help. A BMO Harris banker can help you review your situation and create a priority payoff plan based on which debt has the highest interest rate. As your debt begins to shrink, consider using the cash you've freed up to open a savings account so you can break the cycle of using your credit card to fund your expenses.
Survey results cited in this report are from interviews with an online sample of 1,004 Americans conducted by Pollara between July 2nd and July 4th, 2014. The margin of error for a probability sample of this size is ± 3.1%, 19 times out of 20.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris® and BMO Harris Bank® are trade names used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $586 billion in assets (as of July 31, 2014).